Restructure
60%
lower daily payment
Defaulted Mortgage Workouts
Stop foreclosure. Restructure the mortgage. Keep the property.
Commercial and high-value residential mortgage workouts: forbearance, loan modifications, deed-in-lieu, short sales, and negotiated payoffs. For owners and investors fighting acceleration and foreclosure.
CRE
commercial mortgages
JUMBO
residential >$1M
CMBS
securitized loans
HARD
private money
THE PROBLEM
Foreclosure is a process, not an event
FORECLOSURE PAUSED
$3.4M CRE loan
Modified · 18-month interest-only
Most owners burn the early stages — the most leveraged ones — by avoiding the lender or the special servicer.
A mortgage default doesn't mean you lose the property next week. There's a defined sequence: missed payment, demand letter, notice of default, lis pendens, sale date. Every stage has decision points and leverage.
Most owners burn the early stages — the most leveraged ones — by avoiding the lender or the special servicer. By the time they engage, half the optionality is gone.
We engage early, document hardship, and present a restructure proposal the servicer can take to credit. We close foreclosures by closing the loan in a different shape.
WHAT WE HANDLE
6 scenarios, opened up
01
Permanent restructures: rate cut, term extension, principal forbearance, capitalized arrears.
How we run it
- 01Document hardship + property cash flow
- 02Submit modification package to servicer
- 03Negotiate rate / term / principal terms
- 04Sign modification agreement
Typical outcome
Avg outcome: rate cut 1–3%, term extended 5–10 years
02
Defined-term breathing room while the property is repositioned, refinanced, or sold.
How we run it
- 01Build hardship narrative + recovery plan
- 02Negotiate forbearance length and conditions
- 03Execute agreement, pause foreclosure
- 04Hit milestones, exit current
Typical outcome
Avg outcome: 6–18 month foreclosure pause
03
Negotiate a third-party take-out or owner buyback at a reduced principal.
How we run it
- 01Identify takeout source or buyback funds
- 02Approach lender / servicer with DPO
- 03Negotiate discount and timing
- 04Fund payoff, release lien
Typical outcome
Avg outcome: 25–55% reduction on principal
04
Voluntary surrender that avoids foreclosure on credit and limits deficiency exposure.
How we run it
- 01Confirm DIL eligibility (no jr liens, etc.)
- 02Negotiate deficiency waiver and credit reporting
- 03Execute deed and release agreement
- 04Close out at recordation
Typical outcome
Avg outcome: foreclosure avoided, deficiency waived
05
Lender approval of a sale below the loan balance, often paired with deficiency waivers.
How we run it
- 01Market the property concurrently
- 02Submit short-sale package to lender
- 03Negotiate approval and deficiency waiver
- 04Close sale to third-party buyer
Typical outcome
Avg outcome: sale at 70–85% of balance, deficiency waived
06
Navigating securitized loan workouts where decision rights sit with the special servicer, not the lender of record.
How we run it
- 01Identify special servicer of record
- 02Submit hardship package per PSA constraints
- 03Negotiate within securitization rules
- 04Close modification or DPO
Typical outcome
Avg outcome: workout approved within PSA limits
“
FROM THE DESK
Foreclosure is the longest, most well-documented collection process in finance — and that's why owners keep losing in it. Every stage has a leverage point. Most owners don't engage at any of them.
Our process
From
same-day
intake
to
closeout
Most cases hit resolution between months 3 and 6. We move on day one because deadlines don't wait.
01
30-min confidential call. We pull contracts, balances, and current status of each creditor.
Document review · Leverage map · Triage urgency assessment
02
Letter of engagement on file. We open communication with creditors on your behalf, work to pause aggressive collection actions, and help protect your bank accounts.
Engagement letter · Docket monitoring · Bank protection
03
Our team — and an affiliated attorney from our network when needed — handles every creditor communication. We document everything; you stop fielding calls.
Settlement memos · Counter-offers · Discovery if litigated
04
Signed settlement agreements, lien releases where applicable, and a clean path forward for the rebuild.
Final agreements · Lien releases · Closeout package
“Delancey Street walked us through every step. The settlement saved the business — and our credit.”
WHERE WE WORK
Defaulted Mortgage Workouts cases in all 50 states
FAQ
Common questions
How early should I call?
The day you know you can't make the next payment — or, ideally, before. The earliest stage of pre-default is where loan modifications happen most easily. After Notice of Default, we still have leverage; after sale notice, much less.
Will a deed-in-lieu hurt my credit less than foreclosure?
Yes — typically meaningfully so, and the recovery period is shorter. We also negotiate the specific reporting language with the lender as part of the deed-in-lieu agreement.
What about the deficiency?
Deficiency exposure depends on state law, the loan type, and what we negotiate at workout. We aim to extinguish or cap deficiency liability as part of every settlement structure.
My loan is CMBS — can you still help?
Yes. CMBS loans have unique workout dynamics because decisions sit with the special servicer (not the master servicer or original lender), and PSA constraints govern what they can agree to. We work CMBS files regularly.
Hard-money lender, no flexibility?
Hard-money lenders have less institutional flexibility but more individual discretion. We negotiate forbearance, partial paydowns, and extension terms with private mortgage lenders all the time — different conversation, same playbook.
RESOURCES
Read more on defaulted mortgage workouts
Guide
Negotiation flow
1 Demand
2 Counter
3 Term sheet
4 Settled
How does business debt settlement work?
Step-by-step explanation of the negotiation, timeline, and what changes for your business.
Read article
Defense
VS
Fight
$0
if you win
When to settle vs. when to fight
Not every creditor responds to negotiation. Here's how to read the situation.
Read article
Strategy
Avg. payment reduction
54%
Best business debt settlement companies (2026)
How we compare on track record, pricing, and outcomes.
Read article
GET IN TOUCH
Talk to a strategist about your defaulted mortgage workouts case
Free initial review. We'll look at your contracts, the creditor mix, and what's actually triggerable in the next 30 days. No commitment, no sales pitch — just a real read on your situation.
Direct line
212-210-1851
Picked up by an actual case manager — no phone tree.
Email
info@delanceystreet.com
Replies within 4 business hours, 24/7 for COJ emergencies.
Confidential intake
Encrypted document upload
For uploading contracts, UCC notices, and bank statements.
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